Fiscal Year 2013 Water Supply Project Formation Program

Water Supply Improvement Project Study

for Yangon City and Pathein City

Final Report

March 2014

Tokyo Engineering Consultants Co., LTD.

Ya c h i y o E n g i n e e r i n g C o . , LT D .

Y o k o h a m a W a t e r C o . , L T D .

M e t a w a t e r C o . , L T D .

Table of Contents

1 Introduction ........................................................................................................................ 1-1

1.1 Outline of the project ..................................................................................................... 1-1

1.2 Project stages and methods ............................................................................................ 1-3

1.3 Composition of the Study Team .................................................................................... 1-4

2 Understanding the status of the project .............................................................................. 2-1

2.1 Water supply situation and problems in Myanmar ........................................................ 2-1

2.1.1 Status of the water supply sector (national level) .................................................. 2-1

2.1.2 Problems in water supply (national level) ............................................................. 2-1

2.1.3 Problems related to hygiene and waterborne infectious disease (national level) .................................................................................................................. 2-1

2.1.4 Study area (Yangon) .............................................................................................. 2-2

2.1.5 Study area (Pathein) .............................................................................................. 2-6

2.2 Related plans ................................................................................................................. 2-7

2.2.1 Overview of development plan ............................................................................. 2-7

2.2.2 Urgency and priority of Myanmar in relation to the relevant proposals ............... 2-8

2.3 Responsible authority and implementing organization ................................................. 2-9

2.3.1 Administration of water supply in Myanmar ........................................................ 2-9

2.3.2 Project implementing organizations and projects ................................................ 2-10

2.4 Japanese cooperation in the past ................................................................................. 2-12

2.4.1 Financial cooperation in the past ......................................................................... 2-12

2.4.2 Technical cooperation in the past ........................................................................ 2-13

2.5 Cooperation by third country/international organization related to the project........... 2-13

3 Study of the project ............................................................................................................ 3-1

3.1 Yangon ........................................................................................................................... 3-1

3.1.1 Site survey ............................................................................................................. 3-1

3.1.2 Project plan for Yangon ......................................................................................... 3-7

3.2 Pathein City ................................................................................................................. 3-14

3.2.1 Site survey ........................................................................................................... 3-14

3.2.2 Project plan for Pathein ....................................................................................... 3-16

3.2.3 Main components of the Project .......................................................................... 3-20

3.2.4 Project implementation schedule......................................................................... 3-20

4 Items related to effects and impacts of proposed project plan ........................................... 4-1

4.1 Yangon ........................................................................................................................... 4-1

4.1.1 Effects of project implementation ......................................................................... 4-1

4.1.2 Impact of project implementation ......................................................................... 4-1

4.2 Pathein City ................................................................................................................... 4-1

4.2.1 Effects of project implementation ......................................................................... 4-1

4.2.2 Impact of project implementation ......................................................................... 4-2

5 Evaluation proposed project ............................................................................................... 5-1

5.1 Yangon ........................................................................................................................... 5-1

5.1.1 Institutional adequancy and sustainability when major alternatives and the projects are implemented ................................................................................... 5-1

5.1.2 Financial conditions when the project is implemented ......................................... 5-1

5.1.3 Technical validity and sustainability when the Project is implemented ................ 5-2

5.1.4 Environmental considerations ............................................................................... 5-2

5.2 Pathein City ................................................................................................................... 5-3

5.2.1 Institutional adequacy and sustainability when major alternatives and the projects are implemented ................................................................................. 5-3

5.2.2 Financial conditions when the project is implemented ......................................... 5-8

5.2.3 Technical validity and sustainability when the project is implemented ................ 5-9

5.2.4 Environmental considerations ............................................................................... 5-9

6 General remarks ................................................................................................................. 6-1

6.1 Yangon ........................................................................................................................... 6-1

6.2 Pathein City ................................................................................................................... 6-2

Tables

Table 2.1 Water supply sources by Yangon township (as in 2011) ....................................... 2-3

Table 2.2 Status of sewage treatment in Yangon City (2002) ............................................... 2-5

Table 2.3 Number of patients suffering from waterborne diseases and mortality rate in the Yangon district ..................................................................................... 2-6

Table 2.4 Health index related to Yangon City and Pathein City .......................................... 2-8

Table 3.1 Results of Yangon site studies ............................................................................... 3-2

Table 3.2 Results of on-site water quality tests in Yangon ................................................... 3-3

Table 3.3 Analysis of water quality of pond water in Yangon .............................................. 3-4

Table 3.4 Comparison of Yangon water costs ....................................................................... 3-7

Table 3.5 Overview of Yangon Projects ................................................................................ 3-8

Table 3.6 Overview of Yangon Plan .............................................................................. 3-10

Table 3.7 Comparison of Yangon preliminary drinking water cost, commercial water bottle cost, etc., and YCDC water tariff .................................................... 3-12

Table 3.8 Comparison of Yangon Implementation schemes and Probability of its Realization .......................................................................................................... 3-13

Table 3.9 Water quality test results ..................................................................................... 3-16

Table 3.10 Overview of Master Plan water supply areas in Pathein City ........................... 3-18

Table 3.11 Overview of areas for provision of mobile water purifiers in Pathein City ..................................................................................................................... 3-19

Table 3.12 Main components of the proposed Pathein City Water Supply Project ............ 3-20

Table 3.13 Annual implementation schedule of the proposed Pathein City Water Supply Project ..................................................................................................... 3-21

Table 5.1 Preliminary estimated annual revenue from tariff of the Pathein City Water Supply Board ................................................................................... 5-8

Figures

Fig. 2.1 Map of Yangon water supply service areas in the future ......................................... 2-2

Fig. 2.2 Mortality due to diarrhea in Myanmar by states and divisions ............................... 2-7

Fig. 2.3 Administration of water supply in Myanmar ........................................................... 2-9

Fig. 2.4 Flow of ODA requests to Japan related to urban water supply ............................. 2-10

Fig. 2.5 Overall Organization Chart of YCDC and related departments in Yangon Region Government ............................................................................................ 2-11

Fig. 3.1 Yangon candidate study sites ................................................................................... 3-1

Fig. 3.2 Illustration of water supply systems ...................................................................... 3-11

Fig. 3.3 Location of water sources for water supply to Pathein City (Pathein City, Daga River) ......................................................................................................... 3-15

Fig. 3.4 Master plan water supply areas in Pathein City .................................................... 3-18

Fig. 3.5 Areas for provision of mobile water purifiers in Pathein City ............................... 3-19

Location

Source: Ministry of Health, Labor and Welfare, Study Team

Pathein City (Study area)

Yangon Region

Yangon City (Study area)

Ayeyarawady Region

1-1

1 Introduction

1.1 Outline of the project

Country: Republic of the Union of Myanmar (hereafter referred to as Myanmar)

Project area: Yangon city and Pathein city

Project name: Water Supply Improvement Project for Yangon City and Pathein City

Project type: Fiscal Year 2013 Water Supply Project Formation Program

Objectives of the Project: The objectives are to improve the water supply of Yangon City and Pathein City and enhance water supply project planning and formation skills, water supply policy-making skills, and water supply project management skills by conducting site study from professional and technical aspects, and by studying comprehensive measures to resolve issues together with the administrators and staff in charge of water supply in Myanmar.

Background of the project: The achievement of millenium development goals (MDGs) related to access to improved drinking water sources in Myanmar, was 82.3% in 2009-2010, which is a significant improvement from 32% in 1990 (reference year). However, the condition of urban water supply, which contributes to improving public hygiene, is inadequate in both Yangon and Mandalay. In other cities, there is a noticeable lag and there are some cities where water supply does not exist. On the other hand, economic cooperation activities have increased with the progress in the democratization of Myanmar. Presently, development studies related to water supply in Yangon City and its surrounding areas by Japan such as the Preparatory Study for Cooperation in the Water Supply Improvement Program (JICA Master Plan 2013) are in progress, and developments in the provision of water supply are anticipated in Myanmar, which presently lags other countries.

Based on the background mentioned above, a Study Team consisting of experts from two companies and from Yokohama City that formed the consortium this time, was dispatched by the Ministry of Health, Labor and Welfare in Feb 2013 to Myanmar. The Study Team implemented the study for the formation of water supply project plans on three cities of Yangon, Mawlamyine and Pathein, called the Myanmar Water Supply Management Improvement Project for Three Cities (Ministry of Health, Labor and Welfare FY 2012 Study).

As part of this project, it was proposed to formulate water supply project plans for Yangon City and Pathein City (Mawlamyine City not included where provision of water supply through sectoral program loans from Japan is anticipated), bearing in mind the use of mobile water purifiers proposed in this Study.

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Project description: Yangon City JICA Master Plan 2013 currently in progress, envisages development of water supply system (see Fig. 2.1) to the Yangon metropolitan area in 2040 with six townships in the vicinity added to the present service area (33 townships). The plan also considers provision of water supply at the intermediate point (2025) in the forseeable future. However, it is estimated that a considerably long time will be required for water supply to reach the ends of the area even if the provision of water supply progresses according to plan, and the resolution of unserviced isolated communities in the vicinity or the delay in provision of water supply are especially worrisome.

In this study, candidate areas for the project, where safe drinking water has not been adequately ensured and improvements from hygiene aspects are desirable, were selected through consultations with YCDC, and the actual status of drinking water was grasped through site surveys. Effectiveness of ensuring safe drinking water by mobile water purifier was also confirmed, and instruction on formulating of the project plan which aims to make interim water supply by using such equipment until the development of full-fledged water supply system are completed was conducted.

Pathein City This is Myanmars sixth biggest city. Although it is the biggest city in the Ayeyarawady region with urban development anticipated to go hand-in-hand with economic development, water supply has still not been provided in Pathein City.

Taking into account the 2012 study report of the Ministry of Health, Labor and Welfare, the O&M cost for the mobile water purifier was examined, and the selling price of the drinking water was also estimated preliminarily, and willingness of residents to pay for the drinking water was confirmed. Based on such studies , the business model that the new water supply board supplies the drinking water for a price while full-fledged water supply system is under construction was proposed, furthermore instruction on fomulating of the prpject plan was conducted in this study.

Based on the results of the report above, the O&M cost of mobile water purifiers in Pathein City will be closely studied, preliminary estimates made on the selling price of drinking water, and the willingness to pay of the residents will be confirmed. The business model of the Water Supply Board that will sell the drinking water will be studied while making provision for a modern water supply system (see Fig. 3.4), and plans formulated for the proposed project.

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1.2 Project stages and methods

Project stages

General Affairs : JapanYangonPathein Naypyitaw YangonJapan Experts: JapanYangonPathein Naypyitaw YangonJapan Support to General Affairs: Japan PatheinNaypyitaw YangonJapan Yangon Team: Japan Yangon Japan Pathein Team: Japan Pathein Japan

Organizations for discussion (For list of interviewers, see Document 1)

Yangon City Development Committee/Pathein City Development Committee/ Ministry of Planning and Economic Development, Myanmar / Ministry of Foreign Affairs, Myanmar.

Project implementation method

Yangon City Discussion before the study (selection of candidate area for the project), data collection and site survey, general discussion on the results of studies (forming a consensus on problem solving policy, introduction of mobile water purifier by presentation)

Pathein City Discussion before the study (selection of candidate service area), data collection and site survey, general discussion on the results of studies (forming a consensus on problem solving policy, introduction of mobile water purifier by presentation)

Ministry of Planning and Economic Development & Ministry of Foreign Affairs, Myanmar Overview and summary of the Water Supply Improvement Project for Yangon City and Pathein City based on the results of the study and confirming the intention of Myanmar

1-4

1.3 Composition of the Study Team

Name Responsible for Belonging to

Shiro JIMBO Project in-charge / General / Site Supervision TEC

Makoto KANEKO Yangon City / Water supply planning TEC

Wataru SAIKA Yangon City / Mobile Water Purifier System / Water Supply Project Planning

TEC

Kazushi HASHIMOTO Pathein City / Deputy Team Leader / Water Supply Project Management

Yachiyo Engg.

Mitsuhiro OMORI Pathein City / Water Supply System Planning Yachiyo Engg.

Yoshiharu WADA Expert / WaterSupply System Operations and Management Yokohama Water Co. Ltd.

Emi KATO Mobile water purifier implementation plan Metawater Co., Ltd.

Yu ONODERA Work coordination support/water purifier implementation plan

Metawater Co., Ltd.

Osamu NAKAGOMI Advisor (will not participate in site studies) Metawater Co., Ltd.

2-1

2 Understanding the status of the project

2.1 Water supply situation and problems in Myanmar

2.1.1 Status of the water supply sector (national level)

According to an announcement by the Government (November 2006) on the status of achievement of development target related to access to improved drinking water sources in Myanmar, the percentage of access has increased from 32% (urban area 38%, rural area 30%) in 1990 (base year) to 79% in 2003. According to a similar announcement by the Ministry of Health (February 2002), the achievement level has improved to 82.3% (urban area 93.2%, rural area 77.6%) in 2009-2010. However, since the chlorine injection in the Yangon water supply system is inadequate, doubts remain on whether the water can be treated as safe drinking water.

2.1.2 Problems in water supply (national level)

The contribution of municipal water supply to improving public hygiene is inadequate in the major cities of Yangon and Mandalay. In other provincial cities, there is a noticeable lag and there are some cities where water supply does not exist. Not only is the provision of facilities delayed, but also the provision of various related systems and human resource development is delayed. Henceforth, overall development is necessary, such as coordination with the health sector, provision of systems, improved management of the Water Supply Board, and human resource development.

For support to Myanmar in the provision of water supply systems aiming for steady and safe water supply, Japan had dispatched experts for the long term and the short term to the waterworks utility prior to 2004 for the development study of Yangon City and Mandalay City in 2000, before the movement toward democratization in Myanmar. Presently, the Preparatory Study for Cooperation in the Water Supply Improvement Program (JICA Master Plan 2013), which is the development study for provision of water supply to Yangon City and its surroundings, is being implemented. Grant aid cooperation (urgent rehabilitation plan for water supply facilities) and dispatch of advisors for supply of water for domestic use are underway, and these are anticipated to contribute to steady and safe water supply operations.

2.1.3 Problems related to hygiene and waterborne infectious disease (national level)

The status of diffusion of sanitation facilities in 2010 according to WHO/UNICEF Joint Monitoring Program for Water Supply and Sanitation is 76 for the whole country (urban 83%, rural 73%).

In relation to waterborne infectious diseases, the accessibility to improved drinking water sources in 2010 in Myanmar was 83% (urban 93%, rural 78%). However, the served population

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2-3

The water supply in the study area may be broadly divided into the YCDC water supply and others. Water supply sources by township is shown in Table 2.1below.

Table 2.1 Water supply sources by Yangon township (as in 2011)

Township YCDC water supply

(%)

Public wells and taps (%)

Outline of other water sources

Presently served area 33 townships 38

Townships with water supply

2-4

Insufficient capacity of facility

Restriction of water supply as a consequence (average 9 hours)

Lower water pressure and high leakage ratio

No disinfection of water in most of the service areas (only Yegu pumping station has the facility for chlorine injection)

Chronic issues faced are.

Water supply other than YCDC

Other sources of water supply include private wells, rain water storage, small streams/lakes, tap water and well water from neighboring houses, bottled water, water vendors, public wells and public water hydrants. Small-scale public water supply facilities exist in Thanlyin and Kyauktan townships and Thilawa SEZ located in the southern part on the left coast of the Bago River outside Yangon City.

Yangon water supply provision plan New water source development and future metropolitan water supply concept inclusive of the extended water supply service area (39 townships) consisting of 33 townships served presently and 6 additional townships in the vicinity were in the study stage for adopting measures against the rising water demand accompanying the increase in population and rapid economic growth in addition to the chronic water shortage in Yangon City. It is presumably considered in the context of said concept through discussions and coordination with Yangon City in the ongoing study "Preparatory Study of the Yangon City Water Supply Improvement Program started in August 2012.

As a solution to the present issues enveloping the water supply, the JICA Master Plan 2013 envisages provision of water supply (see Fig. 2.1) in the target year 2040 to the Yangon metropolitan area consisting of the presently served area of the city (33 townships) and 6 townships in its vicinity. The plan also shows provision of water supply at the intermediate point (2025) in the forseeable future. However, a considerably long time will be required for the water supply to reach the ends of the areas even if the provision of water supply progresses in line with the JICA Master Plan 2013. Resolving the problems of unserviced isolated communities in the vicinity and the delay in provision of water supply are especially causes for concern.

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2) Status of sanitation and issues related to waterborne infectious disease

Status of sanitation Table 2.2 shows the status of sewage treatment in YCDC. The sewered population is only 7.3% of the entire population, and more than 90% of the population depends on individual treatment. Persons with no toilet, although small (0.3%) , do exist.

Table 2.2 Status of sewage treatment in Yangon City (2002)

Treatment facility Percentage of population (%)

Sewerage system 7.3 Septic tank 18.4 Pour-flush toilet 28.0 Fly-prevention toilet 18.0 Unsanitary toilet 28.0 No toilet 0.3 Source: YCDC

The Yangon City sewerage system has been continuously used since the last 120 years through improvements after it was constructed in 1890 when under British rule. The drainage areas of the sewerage system are the eight townships in the commercial area at the center of the city. This drainage is treated by the sewage treatment plant completed in 2005, with the treated water being discharged into the Yangon River. Urbanization due to rapid economic growth and increase in population went hand in hand with the ageing of sewerage facilities, and wastewater treatment has become a pressing issue. Similar to water supply, a master plan for wastewater treatment is being prepared presently.

Issues related to waterborne infectious disease Table 2.3 shows the number of patients and fatality suffering from waterborne diseases and the number of mortality in the Yangon district.

62% of the residents excluding those (38%) receiving YCDC water supply have been using water that has not been subjected to appropriate water quality controls as drinking water, and these residents are exposed to the risk of waterborne infectious disease.

Disinfection by chlorine in the YCDC water supply is inadequate, and more appropriate disinfection by chlorine is anticipated in the future.

2-6

Table 2.3 Number of patients suffering from waterborne diseases and mortality rate in the Yangon district

Sickness 2007 2008 2009 2010 2011

No. of patients

No. of deaths

No. of patients

No. of deaths

No. of patients

No. of deaths

No. of patients

No. of deaths

No. of patients

No. of deaths

Cholera 4 0 49 0 191 7 22 1 37 0Diarrhea 17,344 7 17,462 9 13,166 10 11,851 2 10,969 4Dysentery 8.507 0 9,489 0 6,135 0 6,361 0 4,436 0Food poisoning 244 7 259 3 435 7 255 0 395 0

Typhoid &para typhoid 103 1 71 1 55 0 98 0 47 0

Viral hepatitis 188 6 251 1 14 4 271 3 205 2

SourceYangon Regional Health Department, Ministry of Health

2.1.5 Study area (Pathein)

1) Status of water supply and problems in the supply of drinking water

Pathein City does not have a modern water supply system. Two bottled water manufacturing plants using RO membrane technology and 1000 or more water vendors (estimated) have the role of supplying drinking water in Pathein City. Water vendors take comparatively good quality water from wells (mainly shallow wells) in temples, etc., fill it in plastic tanks and sell it from house to house. Many of the ordinary residents have wells (shallow wells) in their houses, but the quality of water in most of these wells is poor and unfit for drinking. Consequently, ordinary residents buy bottled water for drinking, but some of the residents, especially poor people either drink well water and water in rainwater storage ponds as-is, or after boiling it.

2) Status of sanitation and issues related to waterborne infectious disease

As mentioned above, Pathein City does not have a modern water supply system, and a major part of the population does not have access to safe drinking water such as bottled water.

Fig. 2.2 shows the moratility due to diarrhoea by state and division in Myanmar, as an example. The mortaility rate due to diarrhea in the Ayeyarawady Region including Pathein City is 0.86 per 100,000 persons, which is more than five times the corresponding value of 0.15 in the Yangon Region.

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Fig. 2.2 Mortality due to diarrhea in Myanmar by states and divisions

2.2 Related plans

2.2.1 Overview of development plan

1) Yangon

The Myanmar Government held discussions with JICA on formulating comprehensive development plans for the Yangon metropolitan area including development of basic infrastructure such as water and sewerage systems, power, roads and so on, after the rapid developments in the political status of Myanmar. After these discussions, the minutes of the meeting related to Yangon City Development Program was signed on 1 May 2012, and agreement was reached on cooperation for city development earmarked in the program. Studies relevant to these are described below.

Yangon Metropolitan Area Development Program Formation Preparatory Study (JICA): Yangon Metropolitan Area Study

Basic Data Collection Related to Inventory of Water Resources in the Tilawa Special Economic Zone and Surrounding Areas (JICA): Thilawa Inventory of Water Resources

2-8

Preparatory Study on Cooperation in Water Supply and Sewerage System Improvement Program for Yangon City in Myanmar (JICA): JICA Master Plan 2013)

These are ranked as the higher ranked plans related to the 2012 Water Supply Project Formation Program.

Additionally, other studies to be implemented before include the following:

Basic Study on the Improvement of Water Supply and Sewerage Systems in Yangon City in Myanmar (Ministry of Economy, Trade and Industry): METI Study

2) Pathein City

A project plan on the Pathein City water supply exists, prepared by the Ayeyarawady regional government with technical assistance from the Central Government (Ministry of Border Affairs at that time).

2.2.2 Urgency and priority of Myanmar in relation to the relevant proposals

Diarrhea (5% in 2010) ranks as the fourth in the list of ten important causes of mortality due to diseases in Myanmar. The health index traced to the water system in Yangon City and Pathein City (number per 100,000) is as shown in Table 2.4 Coordination with the health sector to ensure safe drinking water, and so on, is vitally important to improve this situation.

Table 2.4 Health index related to Yangon City and Pathein City

Mortality rate due to diarrhea*1 Status of waterborne infectious disease*2 2008 2010 2011 Yangon District 0.15 per. Yangon City 313 per. 266 per. Ayeyarawady Dist. 0.86 per. Pathein City 552 per. 510 per.

Source: : Data acquired from WHO Myanmar Office

: HMIS, Department of Health Planning, Ministry of Health

1) Yangon

Yangon has continued to develop as a major economic center even after relocation of the capital to Naypyidaw in 2006. The provision of infrastructure to support Yangon has become an urgent task presently. The provision of water supply system to support domestic and urban activities is becoming a reality with the formulation of the JICA Master Plan 2013. However, a considerable amount of time will be required for the benefits of this provision to reach the entire city. The provision of water supply to the surrounding communities is most likely to be in the last stage.

The number of persons afflicted with waterborne infectious disease shown in Table 2.4 indicates

2-9

a decreasing trend suggesting that the decrease has occurred with the provision and diffusion of water supply systems. The difference in the status of a large city such as Yangon, where water supply has diffused, and a core provincial city such as Pathein City where water supply is yet to be provided, is indicated by the health index value. The candidate project area in the present study is different from the centre of Yangon City; its status similar to that of Pathein City in which water supply is yet to be provided. Since residents drink rain water as-is, there is a high risk from the viewpoint of health and hygiene. The proposed project aims to achieve the Millennium Development Goals and to make improvements from health and hygiene aspects. Moreover, the needs are very important and urgent; besides, this is a matter anticipated to lead to the realization of water supply in village communities at an early stage.

2) Pathein City

Pathein City is the sixth largest city in Myanmar, and it has prospered as a port city. It is also a physical distribution base on the western delta, and is expected to develop as a major city with the economic development of Myanmar in the future. The provision of water supply facilities, an important infrastructure component, is extremely vital to the development of the city and access to safe drinking water; therefore, its immediate materialization is essential.

2.3 Responsible authority and implementing organization

2.3.1 Administration of water supply in Myanmar

After reorganization of the ministries in September 2012 as shown in Fig. 2.3, no functions of centralized guidance and monitoring of urban water supply existed in the administration of water supply in the whole of Myanmar. The authority for doing so has been entrusted to the government of each state/ region.

Central Ministries 7 states/regions

Dept. of Rural Development, Ministry of Border Affairs Guidance & supervision Rural water supply Govt. of state/region Guidance Dev. Committee Management Urban water supply proj.

Source: Ministry of Health, Labour and Welfare, Study Team

Fig. 2.3 Administration of water supply in Myanmar

Fig. 2.4 shows the flow of ODA requests to Japan related to urban water supply. Project requests were made by the Development Committee managing urban water supply to the Central Government through state/regional government. Meeting and coordination with organizations of

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2-11

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Fig. 2.5 Overall Organization Chart of YCDC and related departments in Yangon Region Government

Chief Minister

Region Minister forAgriculture and Livestock

Region Minister forDevelopment Affairs

Yangon Region GeneralAdministration Department,

Ministry of Home Affairs

Yangon Region IrrigationDepartment

Yangon RegionDepartment of

Development AffairsDistricts and Townships,General Administration

Department

Mayor (Chairman ofYCDC)Head of Dept.

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Head of Dept.of Budget and Accounts Secretary

Head of Dept. ofPublic Relation and

Information

Head of Department ofCity Planning and Land

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Head of Dept. ofPlaygrounds, Parks and

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Water QualityMonitoring Section

Head of Dept. of Waterand Sanitation

Deputy Head of Dept. Supporting Branch Deputy Head of Dept.

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Yangon City Development Committee (YCDC) YCDC has the the right to implement projects independently using funds on hand according to the Yangon City Urban Development Law. However, approval request of project is necessary presently, and so also consideration should be given to activities included in the framework of the national budget. Moreover, the environment for adequately exercising this right is not yet ready.

This organization has a committee consisting of members under the mayor (also serves as State Minister of Development) including the Secretary, Joint Secretary and four executive directors (of comittees 3, 4, 5, and 7). Various policies are discussed in this committee. One of the roles of YCDC is water supply, sewerage and sanitation, which falls under the jurisdiction of the Department of Engineering (Water and Sanitation).

Department of Engineering (Water and Sanitation) As shown in Fig. 2.5, the Department of Engineering (Water and Sanitation) consists of six divisions and has 2,196 employees (as in June 2012). It manages and operates water supply and sewerage systems. Requests for water quality inspection are made to the Department of Health under Committee 7. The Water Quality Monitoring Section of the Supporting Branch and the Dept. of Water and Sanitation have the responsibility of monitoring the quality and managing the results.

After realization of the project, the Dept. of Water and Sanitation will manage the operation and maintenance work.

2) Pathein City

Presently, no organization responsible exclusively to water supply facilities exists in the Pathein Township Development Committee.

To provide water supply system in Pathein City henceforth, an organization responsible exclusively for water supply must be set up at an early stage. The newly established Water Supply Board should preferably introduce management systems equivalent to those at international levels by contract agreements with international water operators for managing the water supply system.

2.4 Japanese cooperation in the past

2.4.1 Financial cooperation in the past

Financial cooperation with Myanmar began with the "Japan-Burma Peace Treaty and Compensation Economic Cooperation Agreement in 1954. Financial cooperation by JICA ODA loan started with economic cooperation in 1968, while grant aid was offered from 1975

2-13

onward. However, no new JICA ODA loans were granted after 1987. After the democratization movement in Myanar recently, JICA ODA loans were resumed from January 2013 based on the new Myanmar economic cooperation guidelines.

ODA in the water supply sector in the past was mostly grass-roots grant aid and NGO aid. Aid for water supply provision in urban areas was as below; substantial assistance began from 2012 onward.

Loan assistance

Fiscal 2013 Poverty Reduction Regional Development Plan (Phase 1)

Grant aid cooperation

Fiscal 2013 Yangon City Urgent Rehabilitation Plan for Water Supply Facilities

Development studies

FY 2000 The Study on Improvement of Water Supply System in Yangon City

FY 2000 The Study on Central Drainage Water Supply Plan for Mandalay City

FY 2012 Basic Study on Improvement of Water Supply and Sewerage Systems in Yangon City (Ministry of Economy, Trade and Industry)

FY 2013 Preparatory Study on Cooperative Program for Improvement of Water Supply and Sewerage Systems in Yangon City

Welfare and Medical Cooperation Projects in South-east Asian Countries

FY 1997 Study on the Status of Provision of Water Supply in the Union of Myanmar

2.4.2 Technical cooperation in the past

The track record of cooperation by Japans water supply corporations is as given below. Note that records of cooperation are few in number, and technical cooperation related to water supply has just started.

FY 2002 Long-term dispatch of individual experts (2 years)

FY 2004 Short-term dispatch of individual experts (4 months)

FY 2012 Domestic water supply advisor (underway)

2.5 Cooperation by third country/international organization related to the project

1) Yangon City

At the time of site study, ADB acquired data on implementation of feasibility study of grant aid

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project (water supply, toilets, wastewater, etc.) for areas with no water supply network of the Dala township from the JICA Myanmar Office. However, relevant data from YCDC has not been acquired; therefore, measures need to be adopted to do so while carefully watching trends henceforth.

2) Pathein City

Cooperation between a third country/international organization and Pathein City in relation to the water supply sector could not be confirmed.

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3 Study of the project

3.1 Yangon

3.1.1 Site survey

It is important to select sites for the project in areas where concerns of delay in water supply provision exist or isolated communities in the vicinity exist, after considering the interim provision targets in 2025 shown in the JICA Master Plan 2013 being formulated. At the start of the site study, discussions were held with YCDC, and candidate sites for the project were selected at six locations in line with the objectives of the project. Fig. 3.1 shows the candidate study sites.

Source: Ministry of Health, Labor and Welfare, Study Team

Fig. 3.1 Yangon candidate study sites

Table 3.1, Table 3.2 and Table 3.3 show the results of site studies and water quality inspections implemented with the cooperation of the counterpart.

Legend

Study site

Site water supply area (33 townships) Extended water supply area (6 townships)

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Table 3.1 Results of Yangon site studies

Study site 25.ThaketaT/S 26.DalaT/S 21.Seikgyikhanaungto T/S

34.KyauktanT/S Thongwa T/S No.1 Ward Pyegone Village Pyawbwe Village

Kanaunton (No.14 Ward>

Overview of site area

Overview of area

The T/S is isolated by Bago River in the south and Ngamoeyeik Creek in the north and west; Supply of tap water is at the end of the Gamoek water treatment system. The served population ratio as in 2011 is 14%. This is low considering it is a township close to the center when compared to 38% for the whole of Yangon City. Target in 2025 is 45% according to JICA Master Plan 2013.

Located to the south of the Yangon River, sandwiched between the river and the Central Business District on the other side. Water supply is provided to 23 wards from the water supply facilities of YCDC. The target for 2025 is 45% in the JICA Master Plan 2013. There is no water supply to 23 villages to the south of the 23 wards. For domestic water supply to residents, pond water (rain water storage) is ensured (owned and managed by YCDC)

Located to the south west of Yangon River and to the south of the Twantay Canal. Sandwiched between the river and Ahlone T/S on the opposite side adjacent to CBD. Water supply is not available. Water is being supplied by pipes in raw form only to the Kanaunton (No. 1-4 wards) area from pond water (rainwater storage) managed and owned by YCDC. Water is not being supplied to the remaining 4 out of the 8 wards. Target in 2025 is 30% according to JICA Master Plan 2013.

One of the 6 T/S in the JICA Master Plan 2013 extended areas and a section outside the city at the southernmost end of W.S. area; water is not yet supplied. Water is being supplied by pipes in raw form to 6 of the 9 wards from pond water (rainwater storage) managed and owned by YCDC. Water is not being supplied to the remaining 3 wards. Target in 2025 is 10% according to JICA Master Plan 2013.

Although not included in the JICA Master Plan 2013 extended area, it is one of the sections outside Yangon City adjacent to east Thanlyin that YCDC desires; YCDC water is not being supplied. Water is being supplied by pipes in raw form to 8 of the 10 wards from pond water (rainwater storage) managed and owned by YCDC. For the remaining 2 wards, water from other pond (rainwater storage) is available for use as domestic water.

Population (study site:persons) 3,000 2,500 5,000 30,000 35,000 7,000

Population (total: persons) 253,000

20,000 (only villages excluding YCDC water supply service area) 38,000 48,000 28,000

Existing pipelines Yes No No Yes Yes Yes

Treated water YCDC tap water (no residual chlorine) No No No No No

Water usage status

Rainy season Rain water/ bottled water Rain water Rain water Rain water Rain water Rain water

Dry season Pond water/bottled water

Pond water Pond water Pond water/bottled water (when pond dries up)

Pond water (Rain water, supply through pipe)

Pond water (Rain water, supply through pipe)

Drinking water Rain water consumed as-is or after boiling at all sites. Bottled water also purchased.

Domestic water Rain water or pond water used as-is at all sites

Water supply status

Facility managed by/Owner YCDC

Water supply status

YCDC water supply does not reach Rain water, pond water through hand carts and purchase of 20-L bottle water

Volume satisfied by rain water and pond water

Volume satisfied by rain water and pond water

Water supply sites at 12 locations with public water taps water supply for 1 hour during day and night in the dry season, and purchase of river water sold by hand carts at each door

Water supplied to 6 out of 9 wards; no water supply for 3 wards, population of 1400 persons

Piped water supply to 1400 cases; remaining 4,500 cases for a total of 5900 cases.

Tariff

Water supply 88 Kyat/m3, 1,800 Kyat/month (for households) Pond water free, hand cart 50-gallons 1,000 Kyat, 2L bottled water 300-500 Kyat

Pond water freePond water 18 L x 2 cans, manual transport: 100 to 200 Kyats per trip

Pond water free YCDC supplied water such as pond water is free

Piped water supply: Fixed rate of 2500 Kyat/month per household

Piped water supply: Metered system, 220 gallons- 50 Kyat

Results of site water quality tests Both bacteria and E.coli due to health index detected (for details refer to table of results of water quality tests on site)

Awareness of purchase of bottled water for drinking

20-L bottled water: Many households purchase at 300 to 500 Kyats

20-L bottled water: Households exist that want to purchase this water every day if price is 200 Kyats

20-L bottled water: Households exist that purchase at 500 Kyats

20-L bottled water: Households exist that purchase at 500 Kyats

20-L bottled water: Households exist that purchase at 400 Kyats

20-L bottled water: Households exist that purchase at 400 Kyats

Source: Ministry of Health, Labour and Welfare, Study Team

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Table 3.2 Results of on-site water quality tests in Yangon

T/S Test point Turbidity

(NTU

pH Na* (mg/)

Common bacteria (unit/ml)

E. coli (unit/ml)

25.Thaketa Raw water: No.7 Ward Pond 1.22 7.2 2 10and above

10and above

26.Dala Pyegone Village

Raw water: Aung Tha Pyay Pond

4.47 7.1 18 10and above

10and above

Local House 1 (Private Pot) 6.56 7.1 4 10and above

10and above

26.Dala Pyawbwe Village

Raw water: Sin Thay Gyi Pond 2.85 7.2 16 10and above

10and above

Raw water: Nat Sin Pond 1.21 6.6 5 10and above

10and above

Local House 2 (Private Pot) 0.34 6.7 1 10and above

10and above

27.Sekgyikhanaungto 1-4 Ward

Raw water: Aung Mingalar Pond

7.35 6.4 8 10and above

10and above

Yangon River Dala T/S side near ship berth 970.0 8.0 83 34..Kyauktan Local House 3 (Private Well) 6.66 7.1 31 10and

above 10and above

Thongwa Raw water: Sin Kan Pond 1.43 6.7 4 10and above

10and above

Local House 4 (Tap Water) 3.28 6.4 3 10and above

4

Water quality standards of Myanmar for drinking water (2011 Draft)

5

6.5 to8.5

0

Source: Ministry of Health, Labour and Welfare, Study Team

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Table 3.3 Analysis of water quality of pond water in Yangon

Results of water quality analysis

Sample name Sampled date

Dala T/S Pyabwbwe

Village Nat Sin Pond

12/12

Kyauktan T/S Sin Kan Pond

12/13

Thongwa T/S 31 Acres pond

12/13

Taketa T/S 7Ward Aung Min Galar

Pond 12/13

WHO standards

O. Analyzed item Unit

1 Iron and its compounds mg/L 0.16 0.27 0.58 0.05 0.30

2 Manganese and its compounds mg/L 0.015

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For this project, the diffusion of water supply is inadequate in the service areas of JICA Master Plan 2013 even in 2025 slightly more than ten years in the future. Even now, areas for which access to safe drinking water is difficult are considered in this project, and the following were summarized based on the study results:

YCDC owns and manages rainwater storage ponds in the project candidate sites at six locations. The residents of the areas are using the pond water as drinking water and for domestic use without treatment and without chlorine injection.

The quantity of drinking water used by a family of 5 persons is about one 20-l bottle every two days (rate of 2 l/day.person).

Results of water quality inspections showed the presence of common bacteria as well as E. coli in raw water (pond water), private rainwater reservoirs, private wells, and private draw-off taps (see Table 3.2). When providing water for drinking, efforts are required to avoid risks from hygienic aspects by adopting independent measures such as by boiling the water. However, water is consumed as-is without boiling in many cases to minimize fuel costs; so ensuring safe drinking water is not foolproof.

Water quality of pond water in the study area was analyzed and its water treatment level checked by a Japanese inspecting organization. It was confirmed that the dissolved substances that could not be removed by ceramic membrane, which is a mobile water purifier, satisfied the WHO drinking water quality standards (see Table 3.3).

Although 25.Thaketa T/S is in the YCDC service area, service ratio in 2011 is 14%, and this is comparatively low considering the T/S of 50% or more in the adjacent region upstream. This is attributed to the insufficient absolute water supply quantity from YCDC and the shortage in distribution capacity due to the inadequate provision of pipelines. To cope with the shortage in drinking water and domestic water, water from private wells, water from water vendors and bottled water is being used. However, a target service ratio of 45% is being aimed for in 2025 according to JICA Master Plan 2013. To supply drinking water to about 250,000 persons (2011), the introduction of mobile water purifiers will not be efficient; entrusting the provision of water supply according to JICA Master Plan 2014 would be a good plan.

For the remaining five project candidate sites, rain water is mainly being used as drinking water, and the water from ponds owned and managed by YCDC is being used as-is (untreated raw water) as domestic water. Rain water is not available in the dry season; therefore, either the supernatant water of ponds is used as drinking water or bottled water is purchased.

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Depending on the dry season, ponds may dry up completely (occurred in Seikgyikhanaung to T/S Kanaunton; bottled water from donation used to cope with this problem), so care needs to be taken to check the capacity of pond facility. Regarding the pond water supply method, (1) Transmission by pipeline: 3 sites; (2) Transportation of water by hand carts and by poles carried on shoulder: All areas in 6 sites except where water is supplied by pipelines.

Regarding pond water tariff, Kyauktan T/S with water supply through pipelines: 2,500 Kyats/month (250 yen/month) and Thongwa T/S: 50 Kyats/m3 (5 yen/m3), 220 gallons; at all other sites, pond water from ponds owned and operated by YCDC and owned by temples is free of charge. Transportation of pond water for domestic use, 50-gallon handcart: 500-1,000 Kyats (50-100 yen)/cart; 20 L x 2 poles carried on shoulder: 100-200 Kyats (10-20 yen)/trip.

Bottled water of 20-l capacity costs 300-600 Kyats (30-60 yen) per bottle; the price varies depending on the area, distance, and whether the season is rainy or dry. It was confirmed that the will to buy was stronger when the cost was about 200 Kyats (200 yen) per bottle (1,000 yen/m3). Table 3.4 shows the comparison of water costs.

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Table 3.4 Comparison of Yangon water costs

Item Cost Drinking water (20-l bottle including cost of delivery)

300-600 Kyats/bottle (15,000-30,000 Kyats/m31,500-3,000 yen/m3)

Domestic water (treated water and chlorine injected) (cost for delivery of 50-gallons (227-l) by handcart)

600-1,000 Kyats/bottle (2,600~4,400 Kyats/m3260-440 yen/m3)

Domestic water (treated water and chlorine injected) (cost for delivery of 20 l x 2 by poles carried on shoulder)

100-200 Kyats/container (2,500-5,000 Kyats/m3 250-500 yen/m3)

Domestic water (treated water and chlorine injected) (Kyaukutan T/S pipe water supply)

2,500 Kyats/month. household (YCDC normal household average result 17.8m3/ month) (140 Kyats/m3 14 yen/m3)

Domestic water (treated water and chlorine injected) (Thongwa T/S pipe water supply)

50 Kyats/ 220 gallons4.546 L/gallon (50 Kyats/ m3 5 yen/ m3)

YCDC water tariff (normal household: normal) Revised in April 2012

Meter rate system: 88 Kyats (9 yen)/m3

Fixed rate system1,800 Kyats (180 yen)/month [Water tariff per m3 in fixed rate system (taking average consumption for common household as 17.8 m3/month) 101 Kyats (10 yen)/m3]

Taking conversion rate as 1 yen= 10 Kyats Source: Ministry of Health, Labour and Welfare, Study Team

3.1.2 Project plan for Yangon

1) Selection of the study area

From the site study results of Table 3.1, it was confirmed that the population of 253,000 persons of 5 T/S were using rain water and pond water (rain water storage) as drinking water and domestic water. Although it was surmised based on interviews of residents that persons boiling rain water and using it as drinking water were numerous, there were also persons who drank the rain water without boiling it or the pond water as-is. These problems came to light after the water quality inspections (common bacteria and E. coli were detected at all sites) on site.

Of the 5 candidate projects (service areas), service area 25 (T/S Code) of YCDC, Taketa T/S and 26 (T/S Code), Datal T/S 23 Wards will be entrusted to the measures to be adopted in JICA Master Plan 2013.

Consequently, the 3 T/S for which the served population targets as set in JICA Master Plan 2013 have low levels as shown in Table 3.5 and given below:

- Village areas (served population targets unconfirmed) excluding 26 (T/S Code), Dala T/S 23 Wards

- 27 (T/S Code), SeikgyiKhanaungto T/S(30%),

- 34 (T/S Code), SeikgyiKhanaungto T/S(10%),

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and the following T/S located outside the service area (see Fig. 3.1) about 15 km to the east of the Kyauktan T/S:

- Thongwa T/S

are selected as the study areas, and the contents of the plan to supply drinking water using mobile water purifiers will be studied from the aspects of ensuring safe drinking water.

Table 3.5 gives an overview of the said projects and Fig. 3.2 shows an illustration of the water supply systems.

Table 3.5 Overview of Yangon Projects

Service area Overview of project

26.Dala T/S (South Yangon District)

Study: Supply of drinking water to about 20,000 persons populating 23 villages excluding the YCDC water supply (23 wards) Water sources: Ponds owned and managed by YCDC Treatment system: Mobile water purifiers (mobile) Water supply system: (3) Water source treated water (mobile) Elevated tank

public tap 27.Seikgyi - Khanaungto T/S (South Yangon District)

Study: Supply of drinking water to the scale of 38,000 persons (YCDC 2011) populating a total of 8 wards Water sources: Ponds owned and managed by YCDC Treatment system: Stationary water purifier (area required adjacent to water source since road is narrow) and mobile water purifier Water supply system: No. 1 to No. 4 wards Water source treated water

(stationary) elevated aqueduct pipes for carrying drinking water public taps

No. 5 No. 8 Wards Water source treated water (mobile) elevated water tank public tap

34.Kyauktan T/S (Districts outside Yangon City)

Study: Supply of drinking water to about 48,000 persons (of which 35,000 persons to receive piped water supply) Water sources: Ponds owned and managed by YCDC Treatment system: Mobile water purifiers (mobile) Water supply system: Piped water service area Branch from existing pipelines

treated water (mobile) elevated water tank public taps.

Other areas Water source treated water (mobile) elevated water tank public taps

Thongwa T/S (Districts outside Yangon City) : Extended outside 6 service areas

Study: Supply of drinking water to about 48,000 persons (of which 35,000 persons to receive piped water supply) Water sources: Ponds owned and managed by YCDC Treatment system: Mobile water purifiers (mobile) Water supply system: Piped water service area Branch from existing pipelines

treated water (mobile) elevated water tank public taps.

Other areas Water source treated water (mobile) elevated water tank public tap

Unit drinking water units

2L/person. day *1

*1: Status confirmed by interviews of residents during site study (One 20-L bottle every 2 days for a 5-person family)

Water supply system : Refer to Fig. 3.2 for illustration of water supply system Source: Ministry of Health, Labour and Welfare, Study Team

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2) Overview of plan

Based on the information obtained during site study this time, the scale of the plan, water sources, water supply system and overview of facilities were studied, approximate project costs, and operation and maintenance costs were worked out. Table 3.5 gives the plan overview and Fig. 3.2 shows an illustration of the water supply systems.

The present plan aims to supply drinking water to the residents at this juncture; therefore, the plan is based on the population as of 2011 without considering future population increase.

The procurement of purifier, a key component for this project is likely to be made from Japan, which has abundant experience and good reliability in manufacturing this product. Technology transfer is anticipated to be given through training during general trials and operation and control at the time of handing over of the equipment. Procurement of other equipment is likely to be made locally considering cost reduction.

Considerations are also necessary for establishing a cooperative system for stable supply of water such as support for maintenance and inspection once a year.

3-10

Table 3.6 Overview of Yangon Plan

3-11

Source: Ministry of Health, Labor and Welfare, Study Team

Fig. 3.2 Illustration of water supply systems

3-12

3) Comparison of preliminary estimated drinking water cost, commercial water bottle cost, etc., and YCDC water tariff

Table 3.7 shows the comparison of preliminary drinking water cost and commercial water bottle cost, etc., based on the plans of the Project, with the YCDC water tariff (revised in April 2012). If the cost necessary for ensuring water supply to the residents in the study area is compared with the water cost for the Project, domestic water is at the prelminary O&M cost level of the Project (however, water supply is untreated water supply), and commercial 20-L bottled drinking water is more than two times the preliminary total cost.

Table 3.7 Comparison of Yangon preliminary drinking water cost, commercial water bottle cost, etc., and YCDC water tariff

Type Amount Summary Drinking water supply (m3/year) 97,820 (40+76+96+56) m3 365days Total project cost (x 1,000 yen) 712,000 127,000+201,000+255,000+129,000 Annual O&M cost (x1000 yen/year) 31,800

Drinking water cost per m3 Capital cost (yen/m3) 409 Assuming residual value as 10% and service life

(equipment) as 16 years O&M cost (yen/m3) 325 Median cost of 50 gallons of pond water by hand

cart (260-440 yen/m3) (31,800 97800 m3) x 1,000

Total cost (+) (yen/m3) 735 About half the cheaper level of cost (1500-3000 yen/m3) of 20-L bottled water (including delivery charges)

YCDC water tariff Common household commodity charge (yen/m3)

9 88Kyat/m3(Tariff set by adminstration; full cost (including capital cost) is not recovered. Chlorine injection is inadequate; leakage is high, etc., so repair costs cannot be taken even from O&M viewpoint).

Exchange rate: 1 yen=10 Kyats

Source: Ministry of Health, Labour and Welfare, Study Team

4) Implementation scheme

Supply of drinking water is required public nature from hygiene aspects as well. The Project should preferably be managed in a implementation scheme that considers this point.

Three implementation schemes that can be assumed based on the degree of participation of the public are compared in Table 3.8 Based on the individual project features from the study results this time, the probability of a Public Private Partnership type of implementation scheme is high.

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Table 3.8 Comparison of Yangon Implementation schemes and Probability of its Realization

Implementation scheme Features Probability

Public Mgmt.

Compared to the initial investment of about 700 million yen, the scale too small for the ODA loan. Probability is low since grant aid project is simultaneously ongoing in Yangon. In YCDC, the scale of capital expenditure is small at about 500 million yen (2011/2012 results), and probability of realization is small. Compared to the preliminary O&M cost estimation of 325 yen/m3 and overall cost of 735 yen/m3 (capital cost + O&M cost), the general household tariff is 9 yen/m388Kyats/ m3which is an issue (revision of tariff system, etc., to eliminate the difference in existing tariff without full cost recovery).

Medium

PPP

Water supply service area is under YCDC jurisdiction, and public operability is guaranteed when YCDC participates. Business should preferably be managed by three parties namely YCDC, local company, and Japanese company as the main implementing body, and their roles are as below. YCDC : Aim for a model business by supplying safe drinking water/ participate in business until water supply is provided; take the role of development to other similar areas. Local company : Participate in local business activities through a cooperative system with YCDC, with Japanese Company offering technical expertise. Japanese company : Capacity Development of Private local Companies related with water supply system through this scheme.

High

Private Mgmt.

Duplication in relevant service areas with YCDC; work is restricted by YCDC's water supply policies. Unstable components of business exist such ascompetition with existing local water vendors. Status is such that quantity and selling price cannot be determined.

Low

Exchange rate: 1 yen=10 Kyats Source: Ministry of Health, Labour and Welfare, Study Team

Furthermore, the points below need to be clarified for promoting the business. A close examination of business profitability will become key to the success of the project.

Existence of subsidies for initial investment (elimination of viability gap)

Interest level of public or private loan

Understanding preferential custom duties for import of materials and equipment

Price settings that will ensure that business is not in the red

Number of years for recovery of capital cost (preliminary estimate, taking residual value as 10%, and service life of equipment as 16 years)

Checking the will to purchase drinking water at the set price and setting the scale of the business

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Studying the possibility of forming a cooperative system with local water vendors (stakeholders)

The budget from various perspectives (JICA, etc.) of Japan will be used henceforth, and feasibility study carried out to move to the next step.

3.2 Pathein City

3.2.1 Site survey

Pathein City does not have a modern water supply system, and no responsible organization with expertise related to water supply exists in the Pathein Township Development Committee. Consequently, the Water Supply Board must be set up immediately and the management skills fostered in order to provide a water supply system for Pathein City.

Development of the full-fledged water supply system entails enormous cost and time; on the other hand, the supply of safe drinking water is an urgent task. Accordingly, it was considered effective that the Water Supply Board starts developing the piped water supply system, and in parallel, introduce mobile water purifiers that can be utilized within a short period, and start supply of safe drinking water in some areas. Moreover, it was also considered as effective training for full management for the future full-fledged water supply system to accumulate experiences in such small-scale water supply management through installation of water meters and introudction of service charge collection in some areas.

In view of these circumstances, water quality inspections were carried out and water sources were studied for the three candidate locations (of which two locations were the same as the water sources for the piped water supply) for mobile water purifiers. And the Pathein River and Daga River (see Fig. 3.3),were also inspected for the piped water supply systems. Table 3.9 shows the results of these important water quality tests.

Fig. 33.3 Locationn of water s(Pa

3-15

sources for wathein City,

water supplDaga Rive

ly to Patheir)

n City

3-16

Table 3.9 Water quality test results

Test point Turbidity NTU

pH Iron and its compounds

Aluminum and its

compounds

Color Chloride ion

Pathein River 100.0 8.1 1.20 0.7 18.6 3.0 Daga River 113.0 8.1 2.01 1.03 39.9 2.9 Royal Lake 13.5 8.6 0.24

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(4) The newly established Water Supply Board to conclude Management Contract with international water operator to manage the water supply project at a level of international standard from the biginning.

(1) Establish the Water Supply Board

Establish the Water Supply Board under the Pathein Township Development Committee or the Ayeyarawady Regional Government.

(2) Provision of the piped water supply facilities

The accurate population of Pathein City cannot be established until the census results anticipated in 2014 are published. However, the plan was made based on the figure (139,000 persons) given by the Pathein City officials. The City is divided into 15 wards, and is also divided into the eastern and western parts by the Pathein River. About 90% of the population is concentrated in the east bank area of the Pathein River. For the installation of water supply facilities, the east bank area will be divided into two phases, the first phase covers the central city area (Area 1) and the second phase covers the areas around the central city area (Areas 2, 3). The population density in the west basin area (Area 4) is low, and this area is distant from the water treatment plant; therefore, it will be covered by mobile water purifiers in the future as well. Fig. 3.4 shows the master plan of water supply areas of Pathein City, while Table 3.10 gives the overview.

The water treatment plant is to be constructed on land owned by the Ports and Harbors Bureau on the east basin of Pathein River at the north end of the Pathein City area. The scale of water treatment is 18,000 m3. Rapid sand filtering system shall be applied considering the water quality (turbidity, etc.) of raw water.

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3-18

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3-19

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manage the Water Supply Board and its water supply facilities for a specific limited period (5 years, etc.), and receive management fees. Private water supply operators will not be burdened with tariff risk which means the risk for financial vulnerability based on low tariff etc. will be borne by public sector.

In comparison with full-fredged PPP such as the Concession scheme ,the Lease scheme and the BOT scheme of which regulatory framework is necessary for introducing, the Management Contract is more suitable to encourage private sector to enter into the water supply operation in countries which have high tariff risk, inadequate reglatory framework for the PPP and so on.

Especially, for the newly established Water Supply Board in Pathein City to become proficient in skills for managing and operating a newly provided piped water supply system within a short period, the effective actions are to introduce mobile water purifiers and start a small scale water supply operation, and from this stage onward, implement the project jointly with international water operator through the Management Contract.

Yokohama Water Company has evinced keen interest in participating in the PPP of Pathein City Water Supply Project through this Management Contract.

3.2.3 Main components of the Project

Table 3.12 shows the main components of the proposed Pathein City Water Supply Project.

Table 3.12 Main components of the proposed Pathein City Water Supply Project

Component Approx. cost Remarks

Provision of the piped water supply system (18,000m3/d)

3,000 mil. Yen

Presumed to be divided into phases

Introduction of mobile water purifiers (200m3/d 3 units)

190 mil.Yen

Management Contract with international operator (Such as Yokohama Water Company)

100 mil.Yen Two-stage implementation (3 years + 5 years)

3.2.4 Project implementation schedule

Table 3.13 shows the annual implementation schedule of the proposed Pathein City Water Supply Project.

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Table 3.13 Annual implementation schedule of the proposed Pathein City Water Supply Project

Donor Assistance and/or Government Budget

Ayeyarwady (Pathein) Water Supply Board

2014 2014-2019 2019-2024 2024- -Procurement of mobile ceramic membrane filtration equipment -Establishment of Water Supply Board

-Development of piped water supply system for 70,000 population -Safe drinking water supply by operating mobile ceramic membrane filtration equipment

-Piped water supply for 70,000 population -Development of remaining for 70,000 population

-Piped water supply for 140,000 population

16 staff 16 staff 74 staff 74 staff 106 staff

Advisory Contract (2015-2017)

Management Contract (2018-2022)

Yokohama Water Company

Myanmar Water Supply Service

Joint Venture Yokohama Water Company Myanmar Company

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4 Items related to effects and impacts of proposed project plan

4.1 Yangon

4.1.1 Effects of project implementation

Yangon is working toward the target year of 2025 for provision of water supply in line with the JICA Master Plan 2013, which is being formulated.

Targeted areas in this study are situated on area where the effects of JICA Master Plan 2013 are unlikely to reach even in the target year of 2025, and rain water or raw water from ponds where rain water accumulates will be used as drinking water. In such areas , common bacteria and E. coli were detected during water quality inspections at site study. The region is facing risks in hygiene, and economically well-to-do residents are looking for safe drinking water in bottled water.

Therefor, to supply safe drinking water for such disadvantaged area is expected to have great effect.

4.1.2 Impact of project implementation

None-Chlorine-injected tap water is currently being supplied in Yangon City. Residents are making self-help efforts to ensure safe drinking water by using bottled water, boiled water and so on. However, issues are likely to be resolved during the water supply provision period given in JICA Master Plan 2013.

However, a considerable amount of time is necessary before whole areas under this Project receive the benefits. The socio-political impact of ensuring safe drinking water to even a part of the area where this Project is to be implemented and the avoidance of risks from hygienic aspects in this period is high. Solutions to issues in this Project are anticipated to be applied in many similar areas as the Project areas that exist on the outskirts of metropolitan water supply area, and the technical impact is likely to be large. Moreover, economic impact on the YCDC side due to projects in which new technologies are introduced, diplomatic and publicity impacts on the Japanese side, and furthermore, overseas development by Japanese companies are anticipated.

4.2 Pathein City

4.2.1 Effects of project implementation

Pathein City does not have a modern water supply system and enormous cost and time are required to install a full-fredged water supply system. To cope with that situation,the mobile water purifier, which can be introduced in a short time and is easy O&M, will be effective to

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supply drinking water to some areas earlier.

4.2.2 Impact of project implementation

By implementing this project, not only safe drinking water will be supplied to a part of this area, but also advanced management conforming to international standard can be performed from the beginning of water supply thorough O&M, tariff collection, deliberate business operation etc. under the Management Contract with an international water operator.

Similar to Yangon, the socio-political impact is high for ensuring safe drinking water to even a part of the areas where this Project is to be implemented and the avoidance of risks from hygienic aspects. Instances of this Project are anticipated to be applied in service areas, and the technical impact is likely to be large. Moreover, economic impact on Pathein City due to projects in which new technologies are introduced, diplomatic and publicity impacts on the Japanese side, and furthermore, overseas development by Japanese companies are anticipated.

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5 Evaluation proposed project

5.1 Yangon

5.1.1 Institutional adequancy and sustainability when major alternatives and the projects are implemented

1) Major alternatives

YCDC endorses the promotion of JICA Master Plan 2013 presently being formulated, and does not have any alternative plan for supplying drinking water as a quick solution in the area under study. However, it is adequately aware of the necessity of ensuring safe drinking water, and has shown keen interest in realizing this project.

2) Institutional adequancy and sustainability when the project is implemented

YCDC water supply including the water supply for this project area is being operated and managed by the Department of Water and Sanitation with 2162 employees (as in June 2012) and six divisions, as shown in Fig. 2.5 in Sec. 2.3.2. As of 2011, it has the responsibility to supply water to a served population of about 1,920,000 persons at an average rate of 610,000 m3/d.

The mobile water purifier system proposed in the Project is the first one to be introduced in YCDC. Employees may be endowed with operating and managing skills by handing-over training and by improving the operation and management support system during the operating period (entrustment of support to the procurement source, etc.). Person in charge of water supply are stationed even now at the project areas; considerations for re-organization with the increase in duties may be necessary.

5.1.2 Financial conditions when the project is implemented

Concerning the YCDCs budget operating procedure, all revenues are to be paid to the government of state/region or Central Government and after submitting the budget plan, the budget amount approved by the Central Government is to be received by YCDC from the government of state/region. As a result, YCDC has very little freedom in deciding how profits are used. The right to take self-decisions on capital expenses such as investment on equipment does not exist; approval must be received from an executive committee.

From the fiscal balance for the Department of Water and Sanitation in 2011/2012, the current account revenue amounts to about 4700 million Kyats, and 93% of the current account revenue is due to profits from water supply. The current expenditure is about 4500 million Kyats indicating a slight current account surplus. However, based on the trend of increase of expenditure in the past, there is concern that this current account balance may collapse in the near future. Although at a glance, the income and expenditure seem to be balanced presently, the

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expenditure for chlorine injection indispensable for safe tap water supply and for controlling the correct water pressure is inadequate. Moreover, depreciation cost for capital cost recovery is not included. Incidentally, the unit expenditure of 66 Kyats/m3 based on the estimated consumption in 2011 (68 million m3/year) is 75% of 88Kyats/m3 of average water tariff for common household at a meter-rate revised in April 2012. However, it is not enough to accumulate capital for investment on large facilities and equipment.

Capital expenses such as equipment investment are allocated from special accounts of the Central Government after October 2011. Capital expenses of the Department of Water and Sanitation for 2011/2012 amount to about 4700 million Kyats; however, equipment investment is expected to show an increasing trend with the progress in the Project of JICA Master Plan 2013 henceforth. For this Project, preliminary estimate of equipment investment is about 7000 million Kyats. For ensuring this amount, studies on tariff system with the supply of safe drinking water, improvement of subsidy system for equipment investment, and utilization of ODA (grant aid, loans with low interest, etc.) are necessary.

5.1.3 Technical validity and sustainability when the Project is implemented

Japan has a good track record of membrane filtration. The water treatment process should be simple, treatment has high reliability even if fluctuations exist in raw water quality, equipment is capable of automatic operation, O&M is simple and reliability is high.

The water supply in the project area, where rainwater storage ponds are scattered, and electricity supply is unreliable, requires mobal water supply facility and off-grid power system. In accordance with such condition, the mobile water purifier which meets these requirements isintroduced in this project.

YCDC currently has large-scale facilities for water source, water conveyance, water treatment, water transmission, water distribution and water supply. They are striving hard to improve the technical skills of employees in the operation and maintenance of these facilities. In this Project, safe drinking water will be supplied steadily and continuously while taking necessary measures such as acquiring O&M techniques for the mobile water purifier during handing-over training, assistance for O&M support system (for instance, annual maintenance and inspection contract with the procurement source), ensuring repair costs, etc.

5.1.4 Environmental considerations

Environmental impact as mentioned below may be envisaged for this project. Response to the effects of the impact will be taken during project implementation.

Pond resource utilization : Response to effects on pond users

Land expropriation and involuntary resettlement

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: Response to avoid the occurrence of involuntary resettlement for land expropriation necessary for construction of intake facilities and water treatment equipment, pipelines for drinking water, elevated water tanks and public taps

Land utilization

Response to effects on land required for utilization

Protected area/cultural heritage

Response to effects when protected area/ cultural heritage exist

Atmospheric pollution/noise and vibration/ others

: Response to effects of atmospheric pollution/ noise and vibration/ wastewater from backwashing and filter membrane chemical washing

The legal system for environmental and social considerations in Myanmar is still in the development stage. The Environmental Protection Act which forms the basis does not include descriptions related to environmental impact assessment. The legal system related to environmental impact assessment (EIA) is being prepared by the Ministry of Environment Conservation and Forestry (MOECF). It is preferable to use the JICA Guidelines for Environmental and Social Considerations (April 2010) until the legal system related to EIA comes into force.

5.2 Pathein City

5.2.1 Institutional adequacy and sustainability when major alternatives and the projects are implemented

1) Major alternatives

Pathein City does not have a modern water supply system, and no organization exclusively responsible for water supply facilities exists in the Pathein Township Development Committee. In view of the above, it does not have any alternative plan for supply of drinking water as a quick solution in the area being studied. However, it is adequately aware of the necessity of ensuring safe drinking water, and has shown keen interest in realizing the Project.

2) Institutional adequacy and sustainability when the project is implemented

No organization responsible exclusively responsible for water supply facilities exists in the Pathein Township Development Committee.

Not only the mobile water purifier but also the piped water supply system is to be introduced for the first time. The O&